I really wish we could get back to some kind of standard for our currency. It makes me a little nervous sometimes to think that the only thing that actually gives our money any value is the faith placed in it by the market. So far, that has held out (and it likely will for some time). Of course, since we've removed the gold standard, gold has gotten ridiculously expensive (it has gone back down some, but it's still high, hence its attractiveness to investors), and so at this point, I don't know if there's any going back to the gold standard without devaluing the dollar even further in the short run, although in the long run, it would probably be beneficial, particularly if, say, China starts demanding to pay for petroleum in yuans rather than US dollars, which seems like it might be a thing that's coming.

I don't know what the situation is like in the Great White North, but I imagine it's fairly similar overall (except for the oil thing; that probably wouldn't affect Canada much, unless it opened the door for buying oil with Canadian dollars, which would be a boon to the Canadian dollar even as it deflated the USD).

I think the $USD still has consensual value on the world stage because ever since the end of World War II, when it became clear that the USA not only won the biggest war ever seen but won the world's economy in the process. Most industry, labour, credit, and such were in chaotic disarray; although America was not only physically untouched, with intact and growing industry, but it had huge banking credit.

Markets increasingly began to orbit around the American dollar system. A number of very important commodities, especially oil, could only be purchased in $USD. The world's different fiat currencies after the war were all wobbly, therefore they found an anchor around the $USD. The Bretton Woods monetary agreement was signed after the war, an agreement which linked all currencies in relation to the $USD, and $USD itself linked to the ultimate anchor: gold. By default, the $USD became the world's strategic reserve currency. That partial-gold system, however unfairly advantageous to the USA, still worked and provided much needed stability. It marked a period of prosperity: 1950-1970.

After 1970, even when the partial gold system was purposefully shut down (mainly to stop the Europeans and Japanese from taking payments in American gold), the $USD continued to endure as a global strategic reserve currency. Why? Because it evolved into a petro-dollar and a thing nicknamed a Eurodollar. Petro-dollar obviously meant that all oil purchases were settled on Anglo-American exchanges with greenbacks. With oil price spikes came a global desire to accumulate $USD. The Eurodollar was a nickname for all the $USD outside America (most of which circulated in Europe through the 70s and 80s).

A lot more financial and monetary stuff happened for years later, the most important of which was the US debt system. The demand for US treasuries and bonds stayed consistently strong, especially in times of economic turbulence in the world. Return on investment (interest) has generally been superior to most other countries. The USgov kept cranking up debt, and the world kept buying more and more of the ponzi scheme. As the holder of the strategic reserve currency, the Fed could just print more money and the gov could make more debt.

The Euro appeared in 1999. This could have been a very dangerous competitor to the $USD. Instead, it co-existed as a growing strategic reserve currency, just as the European families co-exist with their American counter-parts. When certain countries like Iraq decided they would settle all their trade payments in Euros and barter, rather than $USD, the USgov coincidentally destroyed the country (at the behest of the Federal Reserve's now-public advice). Other countries tried the same gamble, trying to get away from the $USD system, perhaps even to invent their own (example:Libya). Coincidentally they were either destroyed, overturned by revolution and civil war, and/or hit by crippling heavily sanctions.

Last of all, other currencies and economies have been targeted by non-Western banksters and covert operatives. These places have imploded. Their only way back to security is to invest in dollars and treasuries.

So there you have it. Gold. Oil. Interest payments. Fear of currency crumbles. And finally extreme military violence. These things have supported faith in the $USD.

Gradually these supportive factors will less and less influence to help the dollar. It follows then that global faith in the dollar will eventually tumble. The strong dollar policy will never return, and prices in $USD will rise considerably.

It's my opinion that this decay isn't or won't happen naturally, like a normal empire going into to its degenerative/over-stretch stage. Instead, I believe that the American empire is purposefully being exploited, indebted, and collapsed -- in a controlled, rational, secretive way -- to make way for the first globalist system. From the ashes....

This is what happens when money-printing and central banking intervention gets way out of control. The Japanese have created so much new debt and printed so much money -- with no corresponding rise in production or population to speak of -- that the money just loses value as soon as it is created. The motive pushed on the citizen is to spend, spend and stimulate the market. However, a good portion of citizens are either saving more (in cash at home) or diversifying into better units of monetary wealth (foreign equities or securities, precious metals, etc.)

The total amount of cash stashed at home is estimated to have surged by nearly ¥5 trillion to some ¥40 trillion in the past year, Hideo Kumano, chief economist at Dai-ichi Life Research Institute, said.

He attributed the sharp increase to people not wanting their wealth to become known to authorities following the introduction of the My Number common identification system for tax and social security.

In addition, the BOJ’s negative rate policy “may have fueled concerns among the public about depositing their money in banks,” Kumano said.

The trend is by no means limited to Japan. In Europe, where central banksters are implementing policies that are dangerous to the average saver, cautious people are stashing Euros and foreign notes at home, along with precious metals.

I wish them all luck in their quest to be as free as possible from the controllers. Protect your wealth. You work for it every day and deserve the fruits of your labour.

The bond market is gigantic, dwarfing equities. Unless they are intensely patriotic, individual investors just aren't buying them much anymore for obvious reasons. Central banks, commercial banks, sovereign wealth funds, and other huge investment organizations can be persuaded by governments to buy negative yielding bonds only for so long. Over time, banks will eventually pass these negative rates on to consumers, as we're starting to see in foreign countries.

We're heading into uncharted waters, and huge tectonic changes are being talked about, including a major global reset in finances. Some countries with smaller economies are imploding. A lot of eyes are on Japan, predicted to be the first major economy to have a serious financial earthquake, given its debts and monetary inflation.

The world passed a historic milestone in the past week when according to Fitch negative-yielding government debt rose above $10 trillion for the first time, which as the FT adds envelops an increasingly large part of the financial markets "after being fuelled by central bank stimulus and a voracious investor appetite for sovereign paper." It also means that almost a third of all global government debt now has a negative yield. The amount of sovereign debt trading with a sub-zero yield climbed 5% in May from a month earlier to $10.4 trillion, pushed higher - or lower in yield as the case may be - by rising bond prices in Italy, Japan, Germany and France.

Bonds are weird. They're not stocks, but they apparently work sort of the same as debt vehicles, just for sovereign states: A bond is issued, and then will have a varying price as it is bought and sold on the giant bond market. It also has an interest-bearing yield/return not unlike a stock dividend. People used to buy and hold stocks and bonds for that interest-bearing profit (or price-per-earnings optimism), which clearly shows the success and productivity of the issuing organization. Nowadays they often don't. Governments are totally broke, and many trading corporations actually don't turn a profit anymore. So stocks and bonds are bought and flipped for profit based on the issuer's brand, and because of the inflationary trend of driving prices up. The actual performance of the stock or bond is secondary. If governments were graded on sound budgetary performance alone, almost all would be graded F. Most consumers wouldn't buy their bonds.

Gross: Global yields lowest in 500 years of recorded history. $10 trillion of neg. rate bonds. This is a supernova that will explode one day— Janus Capital (@JanusCapital) June 9, 2016

The USA, however, remains the overwhelmingly largest issuer of govt debt (in the G10) with positive return. This means more money from around the globe will have loyalty to the American debt system and stay within. It also virtually guarantees the expansion of more USGov debt into the future. Whoever will become president will oversee trillions more in new debt.

I haven't posted anything on this subject for a while, except this story is so huge that it merits attention

India, a country with probably the most people in the world and the 2nd-fastest growing economy, is undergoing a sudden monetary revolution. The Indian government and central bank is banning the most popular cash notes: the 500 rupee and 1000 rupee notes, which are $7.30 USD and $14.60 USD respectively. http://www.reuters.com/article/us-india ... 3M07Z?il=0

The Indian authorities first claimed they initiated the ban to fight terrorism and criminality, which is obviously a load of BS. More than 90% of all transactions in India are in cash (including wages). Almost everything in the economy is 'under the table'.

The point of the ban and the rapid attempt to implement digital cash is for the government to go from hardly any control to massive control. Taxation revenues will soar. The movement of currency will be universally tracked and controlled. Cash-starved banks will swell with new digital deposits once hidden under mattresses. Any monetary trick in the book can be brought in because the money officially isn't in your hand anymore. It's a Statist-Globalist dream come true.

The Indian PM, Narendra Modi, finally admitted that the gradual goal will be to make India a cashless society. In the meantime, Modi wants a 'less cash' society, so we can assume other notes will get banned later.

The disruption to the economy has been rapid and disastrous, with whole generations of Indians only ever having used cash their whole lives. Many people don't have bank accounts, or have the bulk of their wealth outside banks.

It's happening in a faraway country. Same things happening in Europe. Does it matter? Could we see it come here?